Kusserow on Compliance: OIG reports concern and interest in billing for ventilators

The HHS Office of Inspector General (OIG) issued a report to CMS expressing concerns about the recent substantial increase in Medicare billing for noninvasive pressure support ventilators (coded as E0464). The agency analyzed Medicare claims data on noninvasive multimodal ventilators, CPAP devices, RADs, and related supplies from 2009 through 2015 and found an increase of 85 times over this period of time. The OIG noted that ventilator technology has evolved so that it is possible for a single device to treat numerous conditions by operating in several different modes—e.g., basic continuous positive airway pressure (CPAP) mode, respiratory assist device (RAD) mode, and traditional ventilator mode. Medicare covers ventilators and RADs for similar respiratory diagnoses, but the selection of the appropriate device is based on the severity of the beneficiary’s condition. RADs are covered for beneficiaries with less severe conditions, whereas ventilators are covered for more severe conditions. CPAP devices are covered for the treatment of obstructive sleep apnea.

Findings

The OIG could not find a reasonable explanation for the increase.

A large proportion of the beneficiaries with E0464 ventilators had recently switched to these devices from using a CPAP device or RAD.

Emergence of this multimodal device, when combined with Medicare coverage and payment policies that favor reimbursement for ventilators, appear to create incentives for suppliers to provide and bill for a ventilator when the device is actually being used as a RAD or CPAP device.

Increased billing trend is being driven primarily by three national suppliers that have rapidly expanded their market share and that accounted for 54 percent of the nationwide growth in ventilator claims from 2012 to 2015.

There has been a dramatic shift in the use of ventilators to treat respiratory conditions rather than neuromuscular conditions.

Medicare also paid $25 million for E0464 ventilator claims with indicators of inappropriate billing (e.g., billing for multiple devices or billing to treat obstructive sleep apnea).

The OIG called upon CMS to monitor the providers with the largest market shares of ventilator beneficiaries or exploring the causes and implications of the shift in diagnoses on ventilator claims, as well as have increased contractor reviews (both prepayment and postpayment) of ventilator claims for improper payments. The results of this report will result in closer scrutiny of these claims and it also may increase interest in future audits and investigations in this area, particular those national suppliers that dominate the market.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.